President Obama signed the 21st Century Cures Act for qualified small business Health Reimbursement Arrangements (HRA) into law recently. The Act contains provisions which would allow eligible small employers to offer a health reimbursement arrangement funded solely by the employer and would reimburse employees for qualified medical expenses (including health insurance premiums).
Employers who qualify need to be aware of the following components of the Act:
The former guidance issued by the Internal Revenue Service (IRS) and the Department of Labor (DOL) – stating that HRAs would violate Affordable Care Act reforms and imposing penalties for these arrangements – has been overturned by the passing of these provisions. However, the IRS and DOL guidance still prohibits this arrangement for larger employers.
For a copy of the new Act, please click here.
Please contact us with questions or assistance with the applicability of this Act on your business.
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